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How to use the NAIC complaint index to compare home insurers
The complaint index compares an insurer's share of complaints with its share of premium. How to read 1.00, where states differ, and why small numbers mislead.
A complaint index tells you whether an insurer draws more or fewer complaints than its size would predict. An index of 1.00 is average, below 1.00 is better than average and above 1.00 is worse. It is one of the few public, regulator-sourced measures of how a company treats policyholders, and it is easy to misread, so use it to rule questions in, not to crown a winner.
The NAIC publishes complaint data for every state through its Consumer Insurance Search, and many state insurance departments publish their own versions. The two are close cousins, not identical twins.
What the index measures
The core idea is a ratio. Maine's Bureau of Insurance, which publishes a homeowners complaint comparison each year, defines the complaint index as the ratio of an insurer's consumer complaint share to its market share. The complaint share is the percentage of all homeowners complaints the Bureau received that were against that insurer. The market share is the insurer's share of homeowners direct premiums written in the state.
Indiana's Department of Insurance describes the same arithmetic in plain terms: an index of 1.00 means the insurer's share of all complaints equals its share of all the business written in the state, 2.00 means its share of complaints is twice its share of business, and 0.50 means half.
Two features of that design matter for a homeowner:
- It adjusts for size. A company that writes a fifth of a state's homeowners business will naturally receive more complaints than one that writes one percent. The index divides that out, which is why raw complaint counts alone are not a fair comparison.
- It is relative. The index compares each insurer with the rest of the market in the same line and state. The NAIC notes that an insurer's index can change not only because its own complaints or premiums moved, but because the whole market for that type of insurance moved. A company can hold steady in complaints and still see its index rise if everyone else improved.
A worked example
Say a state's regulator closes 1,000 homeowners complaints in a year across all insurers (a hypothetical number). Here is how three hypothetical insurers would score:
| Insurer | Share of state homeowners premium | Complaints | Share of complaints | Index |
|---|---|---|---|---|
| Insurer A | 20% | 100 | 10% | 0.50 |
| Insurer B | 5% | 50 | 5% | 1.00 |
| Insurer C | 1% | 30 | 3% | 3.00 |
Insurer A has the most premium and the fewest complaints per dollar of premium. Insurer C is the smallest and looks the worst. Now watch how fragile Insurer C's score is. If it recorded 10 fewer complaints the next year, it would drop to 20 complaints (2%) and an index of 2.00. A handful of complaints from one hailstorm, one agency or one claims office can move a small company's index a great deal, which is why regulators often leave very small insurers off their tables. Maine, for example, lists only groups with five or more complaints or at least 1 percent of the state's homeowners premium.
Where the formulas differ
"Complaint index" is not one national number. Before you compare two figures, check how the publisher built them.
| Publisher | How it works |
|---|---|
| NAIC Consumer Insurance Search | Compiles "closed, confirmed complaint information" that state departments report. You can look up a company by state and insurance type for the past three years. |
| Maine Bureau of Insurance | Complaint share divided by premium-based market share; shown for the past two calendar years. |
| Indiana Department of Insurance | Closed complaints weighted by the company's premium, by calendar year. |
| Texas Department of Insurance | Publishes a dataset of complaint indexes and policy counts, with confirmed complaints and policies in force by company and line of coverage. |
| California Department of Insurance | Ranks insurers on justified complaints per 100,000 policies or exposures, counting complaints closed in the year. |
Premium and policy counts are different yardsticks. Premium-weighting treats a company with expensive coastal policies and a company with cheap inland ones differently from a per-policy count. The word "confirmed" or "justified" also differs by state: a department may count a complaint if the insurer was found to have erred, if it was resolved with a payment, or simply if the department had to investigate. Maine, for example, counts written complaints that required the Bureau to investigate or to write to the company. Read the methodology note on the page you are using, and do not mix a Maine number with a California one.
What the index leaves out
Complaints that never reach the regulator. The index counts what people file with a state insurance department. Many homeowners who are unhappy with a claim never do. Companies with a more engaged or more litigious customer base, or in states where the department makes filing easy, can show more complaints without being worse. See how to file a complaint with your state insurance department for how the process runs.
Which complaints they were. Homeowners complaints usually concern claims: slow payment, a low estimate, a roof dispute, a denial. A company with a clean index may still be tough on roof claims, and one with a high index may have been hit by a single catastrophe. The NAIC also publishes aggregate reports by reason and disposition, so check what the complaints were about when you can.
Price, coverage and financial strength. None of the index tells you how much you will pay, whether the roof is paid on a depreciation schedule, or whether the insurer can pay a hurricane loss. Those come from your quote, your policy and a financial strength rating.
Brand versus legal company. The index is attached to a specific insurer or group, not a marketing name. The company that issues your policy appears on your declarations page; confirm it matches the one you looked up. Insurers also sit inside groups, and some states report by group.
How to look up an insurer
- Find the legal name on your quote or declarations page.
- Open the NAIC's Consumer Insurance Search and choose your state, the company and the insurance type. Homeowners complaints are tracked separately from auto, life and health, so make sure you are viewing the homeowners line, not the company's whole book.
- Set the window to the full three years available. One year can be noise, especially for a small company.
- Compare three or four companies that actually write your address, using the same state and period. The home insurance rules by state and compare home insurers side by side tools help you build the candidate list.
- Check your state's own page. Many departments, including Maine, Indiana and California, post complaint tables that show an index, a count or both.
- Look for a trend. An index that is repeatedly above 1.00 for several years tells you more than one bad year.
- Ask the agent. If a company looks poor, ask the agent how it handles roof, water and matching claims. If it looks good, ask the same questions.
How much weight to give it
| What you see | Reasonable reading |
|---|---|
| Index well under 1.00 for several years, decent volume | A mild positive; complaints are rarer than its size predicts |
| Around 1.00 | Typical for the market |
| Well above 1.00 for several years, large insurer | A real flag worth asking about |
| One high year, small company, few complaints | Possibly noise; check the next year and the reasons |
| No data or not listed | Too small or too new to rate; rely on other evidence |
Treat a bad number as a prompt for questions, not a verdict, and a good one as one box checked. Pair it with What J.D. Power's home insurance studies measure for customer satisfaction and the claims experience of people who filed, with Financial strength ratings: AM Best, S&P, Moody's and Demotech for ability to pay, and with the full checklist in how to research a home insurer in 15 minutes. The overview in choosing a home insurance company: what actually matters shows how the pieces fit.
Key takeaways
- The complaint index is an insurer's share of complaints divided by its share of premium; 1.00 is average, and lower is better.
- Formulas and definitions of a counted complaint vary by state and publisher, so compare numbers only within the same source, state, line and period.
- Small insurers can swing wildly on a handful of complaints, so look at three years, not one.
- The index does not measure price, coverage quality, financial strength or complaints that were never filed.
- Use it with ratings, J.D. Power results and a conversation with an agent, not instead of them.